There are lots of risk factors involved in applying in an IPO and some of them are:
१ There is no guarantee whether investor get any share or not. In case of over subscription, the shares are allotted on proportionate basis. So the small investors hardly get any allotment in that case.
२ Investor's money also gets locked for some time.
३ After listing, there is a possibility of the shares being quoted at a lesser rate than the rate offered. Thus resulting in loss of not only interest but also principal invested.